SHORT TERM: volatility galore, DOW +257
Overnight, after the market sensed a Trump victory, ES went into bungee cord mode. At one point in time ES was down over 100 SPX points. After ES hit the 5% limit down, was halted for 5 minutes, sanity returned to the futures market. Large swings occurred throughout the night, and Asian markets lost 3.0%. Europe opened near its lows, began to recover, and gained 1.4% on the day. The market gapped down at the open to SPX 2125, rallied to 2141, dropped to 2127, then hit 2145 all within the first half hour of trading. The market had closed at SPX 2140 yesterday. At 10am wholesale inventories were reported higher: 0.1% v -0.2%. The market then dropped to SPX 2130 by 10:30, and then began to rally. Just before noon the SPX hit 2163. Then 20 minutes later it was SPX 2151. After that the market rallied to SPX 2170 by 3:30, only to pullback to 2160, before closing at 2163.
For the day the SPX/DOW gained 1.25%, and the NDX/NAZ gained 0.75%. Bonds lost 51 ticks, Crude rose 50 cents, Gold slipped $1, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: weekly jobless claims at 8:30, then the budget deficit at 2pm.
The market gapped down at the open, capturing a small segment of last night’s selling. Then right after the open the cash market volatility began. But unlike last night, this was to the upside. After a run from Friday’s close at the OEW 2085 pivot to today’s high near the 2177 pivot, and a number of small waves, the SPX must be nearing the high of the first wave up of this potentially explosive, but still unconfirmed uptrend. The initial liftoff of the two previous impulsive uptrends were about 100 points each. This rally has already risen 85 points. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum ended the day with a negative divergence. Best to your trading!
MEDIUM TERM: DOW uptrending, SPX should follow
LONG TERM: uptrend